PostCapitalism Summary

What comes after capitalism? Could information technology and collaboration redefine how society works?

1. Neoliberal Capitalism is Showing Symptoms of Breakdown

Neoliberal capitalism promotes prosperity by encouraging individuals to pursue self-interest within free markets. However, this model is collapsing. Economic growth is slowing, and inequality is on the rise. The OECD predicts that inequality in Western nations will increase by 40% over the next five decades, with financial instability threatening global systems.

Two major issues have catalyzed this failure. First, fiat money, which isn’t backed by tangible assets like gold, has made economies more vulnerable. Governments print fiat money to offset financial crises, but this creates long-term problems, enabling debts that may never be repaid. For example, the Eurozone debt crisis of 2009, exacerbated by Greece and Spain's inability to settle their financial commitments, ultimately required the European Central Bank to print €1.6 trillion.

Second, financialization has entrenched systemic fragility. This process replaces stagnant incomes with credit – credit cards, student loans, and mortgages have become essentials in neoliberal economies. Over time, this produces "imaginary" money, which exists solely as debt and interest, further straining the system.

Examples

• The Eurozone's 2009 debt crisis triggered protective economic measures like fiat printing.
• Widespread financialization increased dependency on credit systems in the 1980s.
• Global inequality projections show widening income gaps as neoliberal structures weaken.

2. Global Inequalities and Digital Advancements Are Hastening Collapse

Another reason capitalism is faltering lies in unresolved global imbalances. Countries reliant on imports, like the United States, accumulate debts due to trade deficits. In contrast, surplus nations such as China and Germany strengthen economically, exacerbating inequalities. This imbalance led to crises like Greece's austerity-driven collapse.

Simultaneously, the rise of information technology is undermining capitalist fundamentals. Neoliberal economics relies on the ownership and scarcity of goods, yet information products – such as ebooks and music – contradict this principle. These goods are easy to replicate at little cost, introducing a dynamic that capitalism struggles to handle. For instance, consider Wikipedia. It can't be owned, doesn't generate profits, and benefits everyone, challenging market mechanisms.

Both factors – imbalances and technology – amplify stress on the current system, making change inevitable. They highlight the incompatibility between classical economic models and our evolving societies.

Examples

• Greece's financial collapse showcased the dangers of escalating national debt.
• Wikipedia undermines capitalist market principles and remains non-commoditized.
• Information goods defy scarcity, a core concept of supply-and-demand economics.

3. We’re Seeing a Break in Long-Standing Cycles of Capitalism

Historically, capitalism has endured crises through adaptability. Economist Nikolai Kondratieff showed that it moves in cycles, each comprising a 25-year upswing of innovation and growth, followed by a downturn. For instance, the post-WWII economic upswing was driven by advanced industrial technologies, lasting until the 1970s.

However, the current wave, which began in the 1990s with breakthroughs in networking and mobile communication, is stalling prematurely. Neoliberalism's shortcomings – from inequality to environmental harm – have disrupted this cycle. Unlike past periods of recalibration, capitalism appears to be reaching its limits.

By failing to adapt, capitalism may face its final transformation into something fundamentally different, as economic cycles no longer suffice to sustain its structure.

Examples

• Kondratieff’s theory predicts historical cycles in capitalism's growth and recessions.
• The 1945-1973 period saw unprecedented economic growth before the 1973 oil crisis.
• The 1990s began a fifth wave, but its potential remains unfulfilled due to systemic failings.

4. Information Technology is Shifting Economic Ground

Information technology is reshaping the economy, undermining traditional capitalistic values. Scarcity, a cornerstone of supply-and-demand economics, is becoming irrelevant as information goods proliferate. Products like iTunes songs can be copied infinitely, challenging traditional market pricing.

Platforms such as Wikipedia, which rely on open collaboration and don’t monetize contributions, demonstrate the transformative nature of these shifts. Information is both limitless and widely accessible, reducing its reliance on profit-driven motives.

As the world leans more toward information-based goods and services, the flaws in capitalism become more apparent. This shift represents a step toward alternative paradigms of societal organization.

Examples

• iTunes and other digital platforms allow infinite replication of songs and goods.
• Wikipedia operates outside profit-making structures yet thrives collaboratively.
• Information goods don't align with traditional scarcity-based valuation.

5. Marx’s Labor Theory Finds Renewed Relevance in the Digital Era

Karl Marx argued that a product’s value comes from the socially necessary labor used to create it. This perspective explains the value of digital information goods. For example, an ebook’s worth lies not in its physical form but in the labor and knowledge invested in its creation.

However, Marx misjudged the proletariat’s revolutionary potential. Instead of dismantling capitalism, working classes have coexisted with it for centuries. Modern dissatisfaction emerges not just from laborers but from broader societal movements challenging inequality and environmental destruction. These groups play an expanding role in advocating for systemic transformation.

Examples

• Marx’s labor theory accounts for digital services where value stems from intellectual input.
• Protests like Occupy Wall Street highlight dissatisfaction with capitalism's impacts.
• Young activists worldwide rally against income inequality and climate issues.

6. Shifts Toward Postcapitalism Will Mirror Historical Transitions

The emergence of capitalism from feudalism illustrates how economic systems evolve over centuries. Events like the 1300s famines or the invention of the printing press dismantled feudal structures and catalyzed change.

Similarly, today's systemic shifts – from energy crises to aging populations – will take time to reshape society. Climate change and dwindling natural resources particularly pressure the capitalist model. A transition into postcapitalism will likely prove complex and gradual, driven by technical innovation and urgent global issues.

Examples

• The feudal collapse wasn’t instant but stemmed from compounded failures like famines.
• The printing press revolutionized ideas, paralleling how tech reshapes the economy today.
• Aging societies in rich nations highlight challenges requiring structural economic change.

7. Collaborative Production is Replacing Ownership Models

Emerging technologies and self-organized collaborative platforms like Wikipedia reflect workable alternatives to capitalism. Crowdsourcing knowledge or inventing community-run resources reveals the power of collective action rather than ownership.

This shift unsettles capitalism because the drive for profit and property becomes secondary to shared benefits. Open-source software and communal knowledge hubs are early indicators of this systemic transformation.

Examples

• Wikipedia bypasses ownership by operating as a globally shared resource.
• Open-source programming provides free tools that billions rely on.
• Community energy projects demonstrate decentralized, shared benefits replacing profitability.

8. Governments Should Initiate Strategic Postcapitalist Policies

States have essential roles in aiding the transition to postcapitalism. Policies could focus on public ownership, basic income, and removing monopolistic practices. Tax incentives might help promote sustainable technologies or collaborative systems. Measures like outlawing monopolies or protecting public goods would enable fair markets.

Providing citizens with a guaranteed income would empower creative and innovative pursuits, supporting the collaborative culture necessary for the postcapitalist era.

Examples

• Basic income programs have been piloted, offering security outside typical employment systems.
• Anti-monopoly efforts guard against exploitative pricing and unfair business practices.
• Tax breaks could effectively support renewable energy adoption over fossil fuel dependency.

9. Climate and Population Issues Demand Immediate Reorientation

Besides technical progress, environmental and demographic realities mean capitalism cannot survive in its current form. Global warming necessitates policies focused on sustainability rather than profit, and aging populations pose challenges to pension systems and labor markets.

New economic models must prioritize not just efficiency but solving human and planetary challenges. These pressing concerns will further push states and societies toward alternative arrangements.

Examples

• UN projections estimate severe impacts from uncontrolled global warming.
• Lower birth rates in Europe and Asia indicate problematic future worker shortages.
• Extreme weather events linked to carbon emissions highlight flaws in profit-driven industries.

Takeaways

1. Focus on supporting and engaging with collaborative platforms like Wikipedia to build skills for a future based on shared, non-monetized efforts.
2. Advocate for policies that prioritize sustainability, renewable energy, and basic income ideas in your community or workplace.
3. Stay informed about shifts in global economies to anticipate and adapt to forthcoming changes in consumption and work habits.